Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend  
Printer Friendly Page Save As Favorite Save As Favorite View Article Stats
4 comments

OpEdNews Op Eds

Euro crisis: Prison of nations

By (about the author)     Permalink       (Page 1 of 2 pages)
Related Topic(s): ; ; ; ; ; ; ; ; ; ; (more...) ; ; ; ; ; , Add Tags  (less...) Add to My Group(s)

View Ratings | Rate It

Headlined to H3 3/7/09

Become a Fan
  (6 fans)

opednews.com

Sarkozy’s ‘incoherence’ is a sign of the euro-impasse.
 
Riots swept across Eastern Europe this winter. In Latvia 100 were arrested when they attacked the Finance Ministry with cobblestones from the quaintly restored tourist area protesting unemployment, budget and wage cuts. In Lithuania, riot police fired rubber-bullets and tear gas on a trade union march. A demonstration in the Bulgarian capital turned violent leading to the arrest of 150 protesters. These three states are all members of the Exchange Rate Mechanism (ERM2), the euro’s pre-detention cell. They must join.

The IMF calls for devaluation of the currencies of these “economies”, which are not really economies at all after their deindustrialisation over the past two decades, but the euro-agreements prevent this. And even if they could do the IMF number, their huge mortgage debts contracted in euros and Swiss francs over the past decade would still be unrepayable.

Latvia’s government was trying to comply with IMF-imposed measures to qualify for an emergency loan, much like Argentina in 2001, when brutal cuts to education and social programmes sparked a general strike and radicalised the entire nation (except, or course, those responsible for the crisis). The riots in Lativa brought the government down and its credit rating was just lowered to junk status.

It’s no better inside euroland. Q: What’s the difference between Ireland and Iceland ? A1: The letter “c”. A2: Six months.

We haven’t even mentioned Greece, which is already considered a failed state, virtually in a state of civil war since last September. And now the very pillars of the European Union are crumbling. In January, hundreds of thousands marched in French cities in the biggest protest in two decades. An ongoing month-long strike in France’s far-flung Guadeloupe is now full-scale urban warfare, with the dead including a trade union leader. The ruling white elite and tourists are at this very moment fleeing in panic. Martinique and Reunion have joined in.

In Britain demos are breaking out across the country protesting unemployment and the bank bailouts. The British National Party shocked the establishment by winning a council seat in Kent, “penetrating” the south of England, and are expecting major gains in the EU elections in June. Spain lost a million jobs in 2008 and the unemployment rate is expected to reach 25 per cent this year. Spain’s (and Ireland’s) so-called wage inflation now requires wage deflation, workers are told. With Spain’s high debt levels, this is impossible. Even if it were possible, wage deflation is a recipe for revolution.


Marches protesting the economic plight of the people are expected to grow and lead to further violence throughout Europe, with Greece as the prequel. Suddenly, the spectre of the end of the EU, certainly the end of the common currency, is being raised. Coined to convince the “free world” of the dangers of Communism, the domino effect is back with a vengeance.

The string pullers over the past two decades managed to transform the face of Europe, destroying the Soviet Union and expanding the EU and NATO rapidly eastward. But just as Napoleon and Hitler before them, the over-confident conquerors moved too far too fast, and now face the prospect of losing everything. The marvel of the euro zone is now derided as the Völker-Kerker (prison of nations) recalling the Austro-Hungarian Empire. Italian journalists have begun to talk of Europe’s “Tequila Crisis”, referring to the collapse of Mexico’s peso in 1993 when the elite took their money to the US. A similar capital flight from Club Med could set off an unstoppable process and even bring the euro down.

What is the euro, except a fixed exchange rate agreement among members? Sceptics have always dismissed it as a dangerous straight-jacket, since Europe is far from uniform. It means national governments are highly restricted in their monetary and fiscal policies to deal with crises. It also means that ripples in Europe become tidal waves, as all the countries’ economic successes or failures happen together.

This is fine if governments are united in pursuing a common agenda to promote stability and prosperity for the common Europeans, but neoliberalism allows for no such political will. The common economic space has merely allowed large companies and banks to take control of the whole market, supposedly to be equal competitors to their big brothers in the US, China and elsewhere. But riding the wave of privatisation and euro-expansion, they threw caution to the winds, with no strong national governments to clip their wings. The EU “government” is exposed as worse than useless, a rubber stamp for this Thatcherite mania, fooling Europeans into thinking there was someone controlling the private chaos.

As the euro begins to slide against the worthless dollar (that’s right), no one is seriously preparing for the possibility of its immanent collapse and what to do about it. Instead, incredibly, a Financial Times columnist calls on the EU to drop its euro-entry requirements for the “economies” of eastern Europe and quickly shepherd them into the “safe” euro-fold. Just as mad as this strategy may seem is the one presently being implemented: to pump endless cash into the banks that have recklessly moved into this economic wasteland.

It is vital to keep the edifice afloat, after all. Virtually all of Eastern Europe is in hock to Western banks and as they go bankrupt, or for the “lucky” ones, their exchange rates plummet with respect to the euro, they represent bargain-basement fire sales for the West. The Polish zloty plunged 50 per cent in the past six months, making it impossible to repay the countless euro-Swiss loans contracted by unwitting Poles, lured by low interest rates.

The banks have lent Eastern Europe about $1.7 trillion, since “independence” and this must be saved from disappearing at all costs. The currently proposed $31 billion to be pumped into the banks is peanuts -- as long as national governments (that is, the people) pay it, of course.

If the steely-nerved bankers can stay the course, the pay-off is potentially immense. Lured into euro-clutches, these orphan nations can now be squeezed. Integration with a vengeance, on a par with their WWII and post-WWII occupations. At least under post-WWII socialism (which many Eastern Europeans remember fondly), the common people were provided for and the ruling party’s privileges circumscribed. But if today’s unsupervised elites keeping sending their money abroad, the pit becomes bottomless. Riots turn into revolutions.

France will no doubt lead the way. Students occupied the Sorbonne recently in a long-running battle against President Nicolas Sarkozy’s education reforms, supported by 70 per cent of the population. French radical politicians Jose Bove and the popular New Anti-Capitalist Party leader Olivier Besancenot have already travelled to Guadeloupe in solidarity with the strikers. “Their fight is our fight — against captialism, exploitation, the big supermarkets,” exhorted a newly radicalised Bastille district activist.

Sarkozy’s popularity is at its lowest at 36 per cent, with a similar number of French saying they would welcome strikes “on a huge scale”. The pollster Dabi said, “There is a sense of incoherence and a sense that Sarkozy does not really know where he is taking France. But that’s largely because there is an incoherence and Sarkozy doesn’t know here he is taking France.”

Next Page  1  |  2

 

http://ericwalberg.com/

Eric writes for Al-Ahram Weekly and PressTV. He specializes in Russian and Eurasian affairs. His "Postmodern Imperialism: Geopolitics and the Great Games" and "From Postmodernism to Postsecularism: Re-emerging Islamic Civilization" are available at (more...)
 
Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Timelines 2000-2010: US, Europe, Latin America, Africa&Asia

Timeline 2000-2010: Middle East

Euro crisis: Prison of nations

From OIC to NAM: Iran's peace offensive

NATO vs CSTO: The Fog of War

The logic of 9/11: US-Saudi-Pakistani connections

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
4 people are discussing this page, with 4 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

"Service economy" to believe in? Or is it "stimu... by Arktig Silver on Saturday, Mar 7, 2009 at 4:17:09 PM
 This is good reading!Bankers are everyone... by ConSion on Saturday, Mar 7, 2009 at 4:39:30 PM
Fabulous article. It sums up the reality we face q... by William Whitten on Saturday, Mar 7, 2009 at 10:35:14 PM
We must enact changes in our banking system for th... by dianeb 1123398992 on Sunday, Mar 8, 2009 at 1:45:12 AM